Impact of computerization on firm performance: a case of Shanghai manufacturing enterprises

The impact of computer-related input on firm productivity is not well understood in the developing world, including China. The present study contributes to this area by analyzing data collected from a sample of Shanghai manufacturing enterprises. Adopting a Cobb-Douglas production function, we find a positive relationship between computer personnel and enterprise output. The efficiency of enterprises, however, was shown to be generally low according to data envelopment analysis. The level of computerization was shown to make a positive contribution to improving efficiency in non-state-owned enterprises in both heavy and light industries. This was also shown to be the case for state-owned enterprises in heavy industry.